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2012 (10) TMI 22 - AT - Income TaxAddition made on account of share trading profit on ground that assessee did not furnish details of such business - Revenue contesting order of CIT(A) deleting the addition - Held that - CIT(A) has deleted the addition by verifying the ledger of the broker indicating regular transaction of sale and purchase of share by the assessee during the year. CIT(A) observed that AO is at a liberty to take further action in the matter as per law in the event of any income by way of capital gain is found to be involved in the transaction. No infirmity found in the directions issued by CIT(A), while deleting the addition. Addition made on account of cash deposited in the Bank account, deleted by CIT(A) - Held that - CIT(A) is duty bound to give reasons justifying his action for deletion of any addition. Order passed by CIT(A) without justifying or without giving reason for deletion of any admission has no legs to stand. Accordingly, we set-aside the order of CIT(A) on this ground and in the interest of justice, the matter is restored back to the file of Assessing Officer for deciding afresh as per law - Decided partly in favor of Revenue
Issues:
1. Addition made on account of share trading profit. 2. Addition made on account of cash deposited in the bank account. Issue 1: Addition made on account of share trading profit The appeal was filed by the Revenue against the order of CIT(A)-II, Indore, for the assessment year 2003-04. The addition of share trading profit amounting to Rs. 5,72,478/- was deleted by the CIT(A) based on the argument that the appellant had been investing in shares for many years, and the shares sold were explainable. The CIT(A) observed that the AO did not confront the information collected behind the appellant's back and did not provide an opportunity for explanation, violating principles of natural justice. The deletion was upheld, allowing the AO to take further action if any capital gain income was involved. The Revenue appealed this deletion, but the ITAT found no infirmity in the CIT(A)'s decision, stating that the deletion was as per law, and dismissed the Revenue's appeal. Issue 2: Addition made on account of cash deposited in the bank account The CIT(A) deleted the addition of Rs. 4,00,000/- as income from other activities related to bank deposits and withdrawals in bank accounts by family members. The AO had made the addition without providing any details or reasons, which was contested by the appellant. The AO did not consider the appellant's request to gather details from the department's possession of books and made the addition arbitrarily. Since the AO did not provide any specifics regarding the alleged deposits, the ITAT held the addition to be baseless and directed its deletion. However, the ITAT found fault with the CIT(A) for not providing reasons for the deletion, as required by Section 250(6). The order of the CIT(A) was set aside, and the matter was restored to the AO for fresh consideration, with directions to provide the appellant with a copy of the books for substantiating the cash deposits and to allow a hearing before deciding the issue. Ultimately, the appeal of the Revenue was allowed in part.
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